House approves PIP reform

Voting mainly along party lines, the House approved its attempt to reform Florida's no-fault auto insurance program.

Several changes during the committee process made HB 119 more palatable to critics than the original version, which would have required people injured in an auto accident to seek treatment in an emergency room within 72 hours of a crash. The final version allows the injured up to seven days to seek treatment at a variety of health care providers as long as the initial visit doesn’t cost more than $2,500.

In addition, the House’s version of personal injury protection, or PIP, reform requires insurers to file new rates to reflect the cost savings resulting from the changes; restricts chiropractors from participating in the program; caps attorney fees in individual disputes, but not class action suits; and allows insurance companies to examine policyholders, but not doctors, under oath to determine the facts of a case.

During floor debate, House members applauded Rep. Jim Boyd, R-Bradenton, for leading the chamber’s efforts to reform the no-fault car insurance system. Rep. Bill Hager, R-Boca Raton, said the legislation will help eradicate the “organized crime and worthless back rubs” that drive up car insurance costs.

The House approved the measure 85-30, mainly along party lines. However Democrats John Patrick Julien of North Miami Beach, Mack Bernard of West Palm Beach, Charles Chestnut of Gainesville, Dwayne Taylor of Daytona Beach, and Leonard Bembry of Greenville voted with the majority.

Those who spoke out against the legislation said it went too far in limiting patient freedom without addressing the core issue of fraud.

“This bill is a low pitch in the dirt; don’t swing at it,” Rep. Steve Perman, D-Boca Raton, said. “You’ll strike out with consumer choice. You’ll strike out with small businesses. You’ll strike out with the voters who sent you here to protect their interests.”

Generally speaking, consumer groups, trial lawyers, and chiropractors prefer the Senate’s version of the plan, SB 1860, which is also ready for a floor vote. It strengthens regulations for medical clinics and creates a statewide anti-fraud task force. Both chambers’ legislation would disallow acupuncturists and massage therapists from participating in PIP.

“Rather than toughening penalties on the criminals committing fraud, the plan creates new special loopholes for insurance companies to avoid paying claims, or deny them all together,” he said. “Under this plan, consumers will receive a mere fraction of the auto coverage for which they pay billions each year -- and insurance companies will make a lot more money.”

Also on Friday, the state’s Office of Insurance Regulation released new numbers showing a statewide increase of PIP premiums from $2.4 billion to $2.9 billion in 2011. Insurance companies spend 98.4 percent of PIP premiums on claims and another 9.1 percent on litigation and other related costs, the report said.

Chief Financial Officer Jeff Atwater said those numbers highlighted the need for legislative reforms. Atwater hasn’t chosen between the House and the Senate versions, saying he just wants the two chambers to come together and get something done.

“I have encouraged our legislative leaders to let the data drive the debate on PIP, not special interests groups or the many players benefiting from the current broken system,” Atwater said via a statement. “The data released by OIR today is just another indication that PIP premiums will only continue to skyrocket if we don’t aggressively reform this broken system this year.”